Piramal Enterprises promoted Indiareit Fund Advisors Pvt Ltd is raising a $300 million offshore real estate fund. This is its second offshore real estate fund and it has already raised $150 million, with UK's private equity firm 3i Group being an anchor investor. To raise the next $150 million it has appointed UK-based real estate consultant Savills. The fund plans to invest in and around first-tier Indian cities.

Savills plans to go on investor roadshows in Europe, the Middle East and Asia. It plans to raise the fund by second quarter of this year, and also has an option to raise a further $200 million, subject to investor demand.

For this fund, Indiareit seems to have revised its target amid the global economic meltdown. Last year it announced that its planning to raise $700-800 million for the fund. Then earlier this year Piramal group chairman Ajay Piramal was quoted as saying that the fund has raised $250 million in commitment from 3i Group. But now the fund seems to have reduced the target size.

Indiareit also has two domestic funds and is also planning its third domestic fund. These funds come at a time when India's biggest real estate companies have started delaying projects, cutting manpower and resorted to selling assets to meet loan requirements.

According to a real estate fund report, global fundraising for real estate private equity funds remains strong as a total of 32 funds reached a final close in July-September period last year, raising an aggregate $30.8 billion. Though the investors are still willing to invest in these funds, but they are investing mainly in bigger funds with proven track records. Smaller funds are now finding it much more tougher to raise funds.

Indiareit has raised two domestic funds of Rs 430 crore and Rs 550 crore raised in 2006 and 2007 respectively. The first offshore fund of $200 million was raised in 2006, in which 3i Group invested $40 million.